Tether faces legal action from Conduit after $2.8M freeze lacking justification
Legal proceedings claim that Tether immobilized USDt assets held in a Conduit digital wallet that were linked to a probe initiated by law enforcement officials in Brazil during 2024.
Conduit Technology, a platform specializing in cross-border payments, has claimed that Tether, the issuer of a leading stablecoin, immobilized $2.76 million worth of USDt (USDT) in September 2025 without providing any reasoning for the action.
Through a legal complaint submitted to the US District Court for the Southern District of New York this past Monday, Conduit asserted that Tether immobilized company assets to which the stablecoin issuer possessed "no legal entitlement" and "no claim." The payments platform stated it had started maintaining USDt as a component of its digital treasury wallet beginning in May 2025, claiming that Tether proceeded to freeze the complete $2.76 million worth of the stablecoin during September with "no justification" — a move that Conduit asserted "materially impacted its business."
The funds are unequivocally Conduit's, but Tether has taken them and is denying Conduit access to them. Tether is not allowed to take money from businesses just because they chose to store that money in Tether's currency.
Based on details provided in the legal filing, the asset freeze was linked to an investigation conducted by Brazilian federal police that was initiated in 2024 targeting the financial intermediary Bull Intermediação de Negócios along with Onix. Tether purportedly determined that Conduit's treasury wallet was connected to these entities "on its own initiative using its own criteria," proceeding to freeze the $2.76 million on Sept. 24, 2025.
Conduit stated that it had made multiple requests to Tether seeking the unfreezing of the assets, however the stablecoin company had failed to comply with these requests as of Monday. Cointelegraph made contact with Tether seeking commentary regarding the legal action but had not obtained an immediate reply.
The legal proceedings emerged approximately one month following separate litigation where two individuals from Thailand filed suit against Tether for purportedly freezing $42.4 million worth of USDt after what they characterized as an "informal request" from US Homeland Security Investigations. The assets were reportedly connected to a $61 million pig butchering scheme case that was filed in US District Court for the Eastern District of North Carolina, which had issued a seizure warrant for the USDt during February.